Declining won leads to COLA dip in South Korea
January 17, 2008
The cost-of-living allowance for U.S. troops in South Korea dipped for the first time in more than two months, falling two index points for all locations across the peninsula.
The decline comes on the tail of the won weakening against the U.S. dollar.
Last month, the South Korea currency crept to 941.35, a three-month low versus the dollar, according to financial news services.
On Monday, the won-to-dollar exchange rate was 937.
COLA, which is intended to give U.S. servicemembers stationed overseas the same buying power they would have in the States, can fluctuate as the value of local currencies goes up or down.
For a single E-4 with six years service living on base in Korea, the two-point drop will mean about a $5 drop based on his or her approximate $250 of monthly COLA payments last month. For an E-5 with 10 years and two dependents living off base, it will mean about a $15 drop in the monthly $700 payment.
The latest change to COLA was to go into effect Wednesday. Servicemembers can check to see how much COLA will be in their next paycheck by doing a rate query on the Per Diem, Travel and Transportation Allowance Committee Web site at: http://perdiem.hqda.pentagon.mil/perdiem/.
As of Tuesday, new figures weren’t available for such a query.